DOW JONES NEWSWIRES Cigna Corp. (CI) will cut 1,100 jobs, or about 4% of its worldwide work force, and consolidate some locations to strengthen its competitive position amid the economic downturn.
The move follows a 3% staff reduction last month at rival health insurer Aetna Inc. (AET), which said it plans to eliminate 1,000 positions.
Cigna expects to take fourth-quarter charges of $30 million to $40 million related to the moves.
"Given the unprecedented economic situation we and our customers are facing, these actions are essential to ensure we can meet their needs for high value, cost-effective products and services," said Chairman and Chief Executive H. Edward Hanway.
Cigna told investors last month and on its third-quarter call in October that it would be looking at ways to reduce operating expenses. In December, the company estimated a fourth-quarter loss related to the run-off guaranteed minimum death benefits book of about $175 million after-tax versus a previous expectation of about $165 million after-tax.
Cigna's job cuts are expected to be done by the middle of the year. Those losing jobs will be eligible for severance benefits and outplacement support.
Cigna posted a 53% drop in third-quarter profit, trimmed its enrollment and earnings forecast for 2008, and projected further enrollment declines for 2009, citing competitive and economic pressures.
It expects to report fourth-quarter results Feb. 5.
Cigna's shares closed Monday at $18.15, up 2%, and were unchanged in after-hours trading.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com
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Publié le 05 janvier 2009 Copyright © 2009 Dowjones